John Stossel: Wal-Mart, Private Sector Moved Faster After Katrina Than FEMA

Oct. 15, 2008 — -- It's been three years since Hurricane Katrina ravaged New Orleans. Three years since Mayor Ray Nagin promised to rebuild the city. Three years since politicians agreed to spend $80 billion in tax dollars to do it.

Most people would agree that government should provide aid to people who are the victims of natural disasters. But much of New Orleans still looks like it did a week after Katrina hit.

Block after block of homes in the city's Ninth Ward still look like falling down wrecks. If residents there want to rebuild, they need a permit -- one of many hurdles to jump on the road to recovery.

Rev. Louis Adams of Holy Ground Baptist Church wanted to repair the flood-ravaged building, but the city's permitting process made that impossible. While he was appealing the city's refusal to grant him a permit to repair the church, the city tore down the building by mistake.

Dolores Davis' home was flooded by several feet of water during Katrina. She and her late husband, Harry, applied to the State of Louisiana's Road Home program, which channels money to homeowners who want to rebuild their homes.

More than two years after applying, she's still waiting.

"It's, you know, been one thing after another," Davis said.

"You'll have one worker this day and next week you'll talk to another worker, and you have to explain the same thing over and over," she said.

So, where does the blame belong for the slow pace of rebuilding? Don't point to the city, says New Orleans Mayor Ray Nagin. He says that everyone in government wants to make sure checks and balances are in place to prevent abuse and fraud. But he admits that there's a price to pay for that oversight.

"You have to go through, you know, 10 different approval processes before you can get something actually built," he said. "Governments are not built for speed, period."

When the Private Sector Is Faster Than Government

Government's checks and balances are why so much of New Orleans is still devastated. Yet, less than a mile away from some of the worst destruction is a neighborhood filled with brightly painted, beautiful new homes, all built by Habitat for Humanity. Habitat, a non-profit Christian organization, builds simple, low-cost homes with donated materials and labor.

"When they say they're gonna come in for a build, they build the houses," said jazz singer and New Orleans native Harry Connick Jr. "I mean, they're for real."

Connick helped build those homes -- he and others decided that building homes was the right thing to do. They didn't use government money, and no one in the government told them what they needed to do.

To build the homes, Habitat for Humanity employed specialists who know how to fight through bureaucracy, something the average person may have trouble with.

They built 70 homes -- quickly. Even Nagin admitted they did what the government didn't.

"We're seeing private sector does it better and quicker," Nagin said. "There's not a lot of rules and regulations."

But government does have a lot of rules and regulations, and some people think they get in the way of helping people who need it the most.

"Everything that we have done we have been able to accomplish in spite of the government," said Malik Rahim, one of the co-founders of the Common Ground Collective, a group formed in New Orleans after Hurricane Katrina. Common Ground provides short-term relief and long-term support rebuilding communities affected by hurricanes.

Rahim says that getting to those billions of tax dollars that government set aside for rebuilding was nearly impossible, so he gets money from individual donors, some of them tourists and passers-by.

He has a sign urging people to get out of their cars and lend a hand. They did, as did a number of celebrities.

"Brad Pitt has done more for this community than anyone," Rahim said.

Brad Pitt is doing more than the government of the United States?

"I would say 10 times more than the government," Rahim said.

Pitt founded non-profit group called Make it Right, which aims to build new, energy-efficient homes in the Ninth Ward. Some people doubted that Pitt would follow through, but with few delays, homes started going up. The first homes were finished this summer.

If Brad Pitt and Harry Connick, Jr. can work to build dozens of new homes, why does it take government so long to follow through on its plans? The New Orleans mayor said he has made it easier for people to rebuild their homes, making permits available online at kiosks throughout the city.

"We issued thousands and thousands of permits right after Katrina. So, we tried to get out of the way, and I think it paid off for us," Nagin said. "We have everything online, so you can go online, you can visit a kiosk."

Trying to Navigate Bureaucracy

"20/20" visited New Orleans' city hall to try the kiosks that are supposed to give information on permits and rebuilding. The first one didn't work. None of them did.

But there was a clerk, and she was eager to help.

"If you're doing new construction, you're going to need two sets of architectural plans with a live seal from a Louisiana registered architect or engineer," the clerk said.

"You'd also need a plot plan to make sure it meets the zoning requirements," she said, adding, "a construction benchmark which is a FEMA requirement, so that we know that the structure is built at the right height."

Then she went on to talk about the requirement form that FEMA has that lists the fee schedule and explains the permit and plan review fees.

It took more than 10 minutes for her just to explain the permits. Then came information about the forms needed to dispute the damage assessment.

Of the 314 public projects Mayor Nagin promoted in his "One New Orleans " rebuilding campaign, announced in January 2006, only six are complete.

Nagin blames other levels of government, including the Federal Emergency Management Administration, or FEMA, which he says only made substantial amounts of rebuilding money available to the city in February, 2008.

FEMA disputed that, saying the money had been available to the city for longer. Regional director Jim Stark said, "Mayor Nagin has had money to start his projects for at least two years."

This kind of government paralysis and finger pointing happens everywhere. Even the city that never sleeps hasn't been able to rebuild anything at Ground Zero after seven years. The lack of progress gave Nagin a good answer when a New York-based reporter gave him a hard time nearly a year after Katrina hit.

"You guys in New York City can't get a hole in the ground fixed," he quipped back in August 2006.

Seven years after 9/11, The World Trade Center site is still a hole in the ground and reconstruction is tied up in New York City politics. But right next door is 7 World Trade Center, a building also destroyed in the attacks, yet rebuilt quickly by a private company, Silverstein Properties.

The Trouble With FEMA

When FEMA couldn't get water to people who desperately needed it in New Orleans after Hurricane Katrina, Wal-Mart did. The hurricane was still raging when Wal-Mart warehouse workers prepared to rush in supplies.

"For us, it's all about speed-to-action," said Jason Jackson, who is in charge of Wal-Mart's disaster response team.

Economist Steve Horowitz did a study comparing the hurricane response of companies such as Wal-Mart to that of FEMA.

"One hundred and twenty-six Wal-Mart stores were damaged by Katrina; within 10 days, 110 of them were up and running again," he said.

"[FEMA is] stuck playing by this sort of protocol set of rules that's designed to avoid them making a new kind of egregious mistake," Horowitz said. "If they hold back and wait and sort of don't get the job done promptly, they can always turn around and say, 'Look, we didn't have enough money or resources or power.'"

Jim Stark, who joined FEMA after Hurricane Katrina, admitted there was "some disorganization" at the beginning.

"I'm not surprised that there were mistakes made. I think FEMA's taken very positive steps to fix that," he said. "There's no villain here. It's a process that needs to be worked through with, in a partnership with the state and the city."

Government officials always say things like that, but these types of partnerships often lead to little getting done while others outside government spend their own money to help out.

New Orleans restaurant owner Kappa Horn didn't wait for any partnership to help her out in the aftermath of the hurricane. She knew she needed to get back in business to survive.

"I bought as much food as I could, put in my Volvo station wagon -- ice, water, everything I could think of to make food," she said. "We just started serving food out of an ice chest."

Horn's little diner has fed 150,000 people since Hurricane Katrina.

So, why is Wal-Mart so good at getting customers what they want? What makes Kappa Horn so passionate about keeping her diner in business? Stark says, "probably because they're for-profit."

It's that profit motive that leads people to cooperate without government telling them what to do, and it's helping bring New Orleans back to life, one block at a time.